Exhibit 4(iii)
================================================================================
AMENDMENT NO. 1
TO
CREDIT AGREEMENT
AND WAIVER AND CONSENT
AMONG
AMERICAN GREETINGS CORPORATION,
AS A BORROWER,
THE LENDING INSTITUTIONS NAMED HEREIN,
AS LENDERS,
AND
NATIONAL CITY BANK,
AS THE GLOBAL AGENT AND THE COLLATERAL AGENT
---------------------------
DATED AS OF JANUARY 28, 2005
----------------------------
================================================================================
This AMENDMENT NO. 1 TO CREDIT AGREEMENT AND WAIVER AND CONSENT (this
"Amendment") is entered into as of January 28, 2005, by and among the following:
(i) AMERICAN GREETINGS CORPORATION, an Ohio corporation (the "Company"); (ii)
the Lenders, as defined in the Credit Agreement; and (iii) NATIONAL CITY BANK,
as Global Agent and as Collateral Agent, each as defined in the Credit
Agreement.
RECITALS:
A. The Company, the Foreign Subsidiary Borrowers from time to time
party to the Credit Agreement referred to below, the Global Agent, the
Collateral Agent, the Lenders, KEYBANK NATIONAL ASSOCIATION, as Syndication
Agent, and LASALLE BANK NATIONAL ASSOCIATION, as Documentation Agent are parties
to an Amended and Restated Credit Agreement dated as of May 11, 2004 (as the
same may from time to time be amended, restated or otherwise modified, the
"Credit Agreement").
B. The Company has requested that the Global Agent, the Collateral
Agent, and the Lenders agree to waive and amend certain provisions of the Credit
Agreement, as set forth herein.
C. The Global Agent, the Collateral Agent, and the Lenders are willing
to agree to such waiver and amendment pursuant to the terms and subject to the
conditions set forth herein.
AGREEMENT:
In consideration of the premises and mutual covenants herein and for other
valuable consideration, the Company, the Global Agent, the Collateral Agent and
the Lenders agree as follows:
Section 1. Definitions. Unless otherwise defined herein, each capitalized
term used in this Amendment and not defined herein shall have such meaning
ascribed to it in the Credit Agreement.
Section 2. Waiver. The Company has maintained and permitted certain of its
Subsidiaries to maintain more than $100,000 of inventory on consignment in
violation of Section 4.3(b) of the Security Agreement. Such violation
constitutes a Default and would, with the passage of time, constitute an Event
of Default under Section 8.01(d) of the Credit Agreement (the "Current
Violation"). The Company has requested that the Lenders waive the Default that
has occurred and any Event of Default that may have occurred under Section
8.01(d) of the Credit Agreement as a result of the Current Violation. Effective
as of the Amendment Effective Date (as defined below), and subject to the terms
and conditions set forth in this Amendment, the Lenders hereby waive the Default
and the Event of Default under Section 8.01(d) of the Credit Agreement that has
occurred solely as a result of the Current Violation.
Section 3. Consent.
3.1 The parties hereto hereby consent to Amendment No. 1 to Amended and
Restated Pledge and Security Agreement, dated as of the date hereof, by and
among the Company, each Subsidiary Guarantor, and the Collateral Agent, on
behalf of the Lenders, a copy of which is attached hereto as Exhibit A (the
"Security Agreement Amendment").
3.2 The Company has informed the Global Agent, the Collateral Agent and
the Lenders that AG Interactive, Inc. ("AG Interactive") desires to transfer all
of the equity interests of K-Mobile, S.A., a French societe anonyme, owned by AG
Interactive to A.G. Interactive, B.V., a Dutch company (the "Equity Transfer").
Section 7.02 of the Credit Agreement does not permit the Equity Transfer. The
Company has requested that the Global Agent, the Collateral Agent and the
Lenders consent to the Equity Transfer. Notwithstanding the restrictions set
forth in Section 7.02 of the Credit Agreement, effective on the Amendment
Effective Date (as defined below), the Global Agent, the Collateral Agent and
the Lenders consent to the Equity Transfer, so long as, after giving effect to
this Amendment, no Default or Event of Default shall exist at the time of or
immediately after giving effect to the Equity Transfer.
Section 4. Release. Effective on the Amendment Effective Date, AG
Interactive shall be released from the Subsidiary Guaranty, the Security
Agreement and each other Loan Document to which AG Interactive is a party and,
solely as to AG Interactive, the Subsidiary Guaranty, the Security Agreement and
each other Loan Document to which AG Interactive is a party shall terminate and
have no further force or effect. In connection with the foregoing, the
Collateral Agent hereby releases any security interest or Lien that it may have
pursuant to any of the Security Documents on any of AG Interactive's property or
assets. Each of the Lenders hereby directs and authorizes the Collateral Agent
to take such action as the Collateral Agent shall deem necessary or appropriate
in connection with the foregoing releases, including, but not limited to, the
termination of any UCC financing statements that were filed by the Collateral
Agent with respect to AG Interactive.
Section 5. Amendments.
5.1 Amendment to Lien Covenant. Section 7.03 of the Credit Agreement is
hereby amended (i) to replace the period (.) at the end of subsection (e) with
the following: "; or", and (ii) to add the following new subsection (f) thereto:
(f) Liens on consigned Scan-Based Inventory (as defined in the Security
Agreement), but only to the extent a Grantor Customer (as defined in the
Security Agreement) has a creditor that has a Lien on the inventory of
such Grantor Customer.
5.2 Replacement of Schedule 3. Schedule 3 to the Credit Agreement is
hereby replaced with Schedule 3 attached to this Amendment.
Section 6. Effectiveness.
6.1 Conditions Precedent. The waiver, consent and amendment set forth
above shall become effective as of the date first written above (the "Amendment
Effective Date") if on or before such date the following conditions have been
satisfied:
(i) this Amendment shall have been executed by the Company, the
Global Agent, the Collateral Agent and each Lender, and counterparts
hereof as so executed shall have been delivered to the Global Agent;
(ii) the Company shall have caused each Subsidiary Guarantor to
consent and agree to and acknowledge the terms of this Amendment;
(iii) the Security Agreement Amendment shall have been executed by
the Company, each Subsidiary Guarantor, and the Collateral Agent, and
counterparts thereof as so executed shall have been delivered to the
Global Agent; and
-2-
(iv) the Company shall have provided such other items and shall have
satisfied such other conditions as may be reasonably required by the
Global Agent.
6.2 Amendment Effective Date. The Global Agent shall provide the Company
and the Lenders written notice immediately upon the occurrence of the Amendment
Effective Date. Unless otherwise specifically set forth herein, each of the
waivers, consents, amendments and other modifications set forth in this
Amendment shall be effective on and after the Amendment Effective Date.
Section 7. Miscellaneous.
7.1 Representations and Warranties. The Company, by signing below, hereby
represents and warrants to the Global Agent, the Collateral Agent, and the
Lenders that:
(i) the Company has the legal power and authority to execute and
deliver this Amendment;
(ii) the officers executing this Amendment on behalf of the Company
have been duly authorized to execute and deliver the same and bind the
Company with respect to the provisions hereof;
(iii) the execution and delivery hereof by the Company and the
performance and observance by the Company of the provisions hereof do not
violate or conflict with the Organizational Documents of the Company or
any law applicable to the Company or result in a breach of any provision
of or constitute a default under any other agreement, instrument or
document binding upon or enforceable against the Company;
(iv) after giving effect to this Amendment, no Default or Event of
Default exists under the Credit Agreement, nor will any occur immediately
after the execution and delivery of this Amendment or by the performance
or observance of any provision hereof;
(v) upon the execution and delivery of this Amendment by the
Company, this Amendment shall constitute a valid and binding obligation of
the Company in every respect, enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws of general application affecting the
enforcement of creditors' rights or by general principles of equity
limiting the availability of equitable remedies; and
(vi) each of the representations and warranties set forth in Article
V of the Credit Agreement is true and correct in all material respects as
of the date hereof, except to the extent that any thereof expressly relate
to an earlier date.
7.2 Waiver of Claims. The Company hereby waives and releases the Global
Agent, the Collateral Agent, and each of the Lenders and their respective
directors, officers, employees, attorneys, affiliates and subsidiaries from any
and all claims, offsets, defenses and counterclaims of which any of the
undersigned is aware arising out of or relating to the Credit Agreement and the
other Loan Documents, such waiver and release being with full knowledge and
understanding of the circumstances and effect thereof and after having consulted
legal counsel with respect thereto.
7.3 Expenses. As provided in the Credit Agreement, but without limiting
any terms or provisions thereof, the Company agrees to pay on demand all
reasonable costs and expenses incurred by the Global Agent in connection with
the preparation, negotiation, and execution of this Amendment,
-3-
including without limitation the reasonable costs and fees of the Global Agent's
special legal counsel, regardless of whether this Amendment becomes effective in
accordance with the terms hereof, and all costs and expenses incurred by the
Global Agent, the Collateral Agent or any Lender in connection with the
enforcement or preservation of any rights under the Credit Agreement, as amended
hereby.
7.4 Credit Agreement Unaffected. Each reference to the Credit Agreement
herein or in any other Loan Document shall hereafter be construed as a reference
to the Credit Agreement as amended hereby. Except as herein otherwise
specifically provided, all provisions of the Credit Agreement shall remain in
full force and effect and be unaffected hereby. This Amendment is a Loan
Document.
7.5 Entire Agreement. This Amendment, together with the Credit Agreement
and the other Loan Documents, integrates all the terms and conditions mentioned
herein or incidental hereto and supersedes all oral representations and
negotiations and prior writings with respect to the subject matter hereof.
7.6 Counterparts. This Amendment may be executed in any number of
counterparts, by different parties hereto in separate counterparts and by
facsimile signature, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.
7.7 Governing Law. THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF OHIO
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES. TO THE FULLEST EXTENT PERMITTED
BY LAW, EACH CREDIT PARTY HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF OHIO
GOVERNS THIS AMENDMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
7.8 JURY TRIAL WAIVER. EACH OF THE PARTIES TO THIS AMENDMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AMENDMENT OR ANY OF THE OTHER
LOAN DOCUMENTS (INCLUDING, WITHOUT LIMITATION, ANY AMENDMENTS, WAIVERS OR OTHER
MODIFICATIONS RELATING TO ANY OF THE FOREGOING), OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
[Signature pages follow.]
-4-
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as
of the date first above written.
AMERICAN GREETINGS CORPORATION
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: VP, Treasurer and Investor Relations
NATIONAL CITY BANK,
as the Global Agent, the Collateral Agent, the Swing
Line Lender, a LC Issuer, and a Lender
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
Signature Page
to
Amendment No. 1 to Credit Agreement and Waiver and Consent,
dated as of January 28, 2005,
by and among American Greetings Corporation, as a Borrower,
National City Bank, as the Global Agent and the Collateral Agent, and
the Lenders party thereto
NAME OF INSTITUTION: National City Bank, Canada Branch
By: /s/ Xxxxxxxx X. Xxxxx / G. Xxxxxxx Xxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxx / G. Xxxxxxx Xxxxx
Title: VP / SVP
Signature Page
to
Amendment No. 1 to Credit Agreement and Waiver and Consent,
dated as of January 28, 2005,
by and among American Greetings Corporation, as a Borrower,
National City Bank, as the Global Agent and the Collateral Agent, and
the Lenders party thereto
NAME OF INSTITUTION: LaSalle Bank National Association
By: /s/ Xxxxx X. Xxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxx
Title: AVP
Signature Page
to
Amendment No. 1 to Credit Agreement and Waiver and Consent,
dated as of January 28, 2005,
by and among American Greetings Corporation, as a Borrower,
National City Bank, as the Global Agent and the Collateral Agent, and
the Lenders party thereto
NAME OF INSTITUTION: PNC Bank, National Association
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director
Signature Page
to
Amendment No. 1 to Credit Agreement and Waiver and Consent,
dated as of January 28, 2005,
by and among American Greetings Corporation, as a Borrower,
National City Bank, as the Global Agent and the Collateral Agent, and
the Lenders party thereto
NAME OF INSTITUTION: JPMorgan Chase Bank, N.A.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
Signature Page
to
Amendment No. 1 to Credit Agreement and Waiver and Consent,
dated as of January 28, 2005,
by and among American Greetings Corporation, as a Borrower,
National City Bank, as the Global Agent and the Collateral Agent, and
the Lenders party thereto
NAME OF INSTITUTION: The Bank of New York
By: /s/ Xxxxxxx X. XxXxxxxxx
-------------------------------
Name: Xxxxxxx X. XxXxxxxxx
Title: Vice President
Signature Page
to
Amendment No. 1 to Credit Agreement and Waiver and Consent,
dated as of January 28, 2005,
by and among American Greetings Corporation, as a Borrower,
National City Bank, as the Global Agent and the Collateral Agent, and
the Lenders party thereto
NAME OF INSTITUTION: The Bank of Nova Scotia
By: /s/ X. Xxxxxx
--------------------------
Name: X. Xxxxxx
Title: Assistant Agent
Signature Page
to
Amendment No. 1 to Credit Agreement and Waiver and Consent,
dated as of January 28, 2005,
by and among American Greetings Corporation, as a Borrower,
National City Bank, as the Global Agent and the Collateral Agent, and
the Lenders party thereto
NAME OF INSTITUTION: The Northern Trust Company
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Signature Page
to
Amendment No. 1 to Credit Agreement and Waiver and Consent,
dated as of January 28, 2005,
by and among American Greetings Corporation, as a Borrower,
National City Bank, as the Global Agent and the Collateral Agent, and
the Lenders party thereto
NAME OF INSTITUTION: Barclays Bank PLC
By: /s/ Xxxxx Xxxxxxx
--------------------
Name: Xxxxx Xxxxxxx
Title: Director
GUARANTOR ACKNOWLEDGMENT AND AGREEMENT
Each of the undersigned consents and agrees to and acknowledges the terms
of the foregoing Amendment No. 1 to Credit Agreement and Waiver and Consent,
dated as of January 28, 2005 (the "Amendment"). Each of the undersigned
specifically acknowledges the terms of and consents to the waivers set forth
therein. Each of the undersigned further agrees that the obligations of each of
the undersigned pursuant to the Subsidiary Guaranty executed by each of the
undersigned shall remain in full force and effect and be unaffected hereby.
Unless otherwise defined herein, each capitalized term used in this Amendment
and not defined herein shall have such meaning ascribed to it in the Credit
Agreement (as defined in the Amendment).
Each of the undersigned, by signing below, hereby waives and releases the
Global Agent, the Collateral Agent, and each of the Lenders and their respective
directors, officers, employees, attorneys, affiliates and subsidiaries from any
and all claims, offsets, defenses and counterclaims of which any of the
undersigned is aware arising out of or relating to the Subsidiary Guaranty and
the other Loan Documents, such waiver and release being with full knowledge and
understanding of the circumstances and effect thereof and after having consulted
legal counsel with respect thereto.
EACH OF THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THE
AMENDMENT, THIS GUARANTOR ACKNOWLEDGMENT AND AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS (INCLUDING, WITHOUT LIMITATION, ANY AMENDMENTS, WAIVERS OR OTHER
MODIFICATIONS RELATING TO ANY OF THE FOREGOING), OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
IN WITNESS WHEREOF, each of the undersigned has executed this Guarantor
Acknowledgment and Agreement as of January 28, 2005.
AGCM, INC.
XX.XXX, INC.
EAGENTS, INC.
EGCB, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Xxxxxxx Xxxxx, Assistant Treasurer
of each of the foregoing Subsidiary
Guarantors
AGC HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Xxxxxxx Xxxxx, Vice President
AGC, INC.
A.G.C. INVESTMENTS, INC.
A.G. EUROPE, INC.
A.G. (UK), INC.
A.G. INDUSTRIES, INC.
CARLTON CARDS RETAIL, INC.
CARLTON (U.K.) RETAIL, INC.
CREATACARD, INC.`
CREATACARD INTERNATIONAL
LEASING, INC.
CUSTOM HOLDINGS, INC.
XXXXXX GREETINGS, INC.
XXXXXX GREETINGS INTERNATIONAL
LIMITED
XXXX XXXXX (AUSTRALIA) LTD.
XXXX XXXXX (N.Z.) LTD.
XXXX XXXXX HOLDING CORPORATION
LEARNING HORIZONS, INC.
MAGARK LLC
MAGTENN LLC
MEMPHIS PROPERTY CORPORATION
PLUS XXXX, INC.
QUALITY GREETING CARD
DISTRIBUTING COMPANY, INC.
SUPERVEND, INC.
THOSE CHARACTERS FROM
CLEVELAND, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Xxxxxxx Xxxxx, Treasurer of each of
the foregoing Subsidiary Guarantors
BALLOON ZONE DISTRIBUTION, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Xxxxxxx Xxxxx, Vice President